Cost Control & Reduction

Overview

Profit improvement impacts a variety of factors within an organization. Cost control is one aspect of this process. Here are some of the areas in which Brown Smith Wallace has the expertise to help you negotiate fees and control your costs:

Retirement Plan Fee Analysis

Have you reviewed the total cost of your retirement benefit plan? If you have utilized the same vendor for more than four years, you are probably paying too much. A retirement plan fee analysis involves a comprehensive assessment where we look for cost savings and alternative payment methods.

Budgeting, Planning and Forecasting

Too often businesses view budgeting as a once-a-year financial process. We can help you make budgeting, planning and forecasting part of an ongoing, dynamic performance management process.

We evaluate your current resources and create an accounting structure and budget. This information will help you maximize the utilization of your assets and create a scorecard by which you can measure performance against your business plan.

Business Health CheckupTM

To help companies with profit improvement, Brown Smith Wallace has developed the Business Health CheckupTM. Our tool provides companies with an assessment that identifies opportunities for cost control and reduction, process improvement, tax and estate planning, along with financial analysis and structuring. From this assessment, we can help you develop a step-by-step action plan that can be the foundation of your company’s long-term success and enable the business to effectively move forward, even in a challenging economic environment.

Contract Review

Companies need a clear understanding of their most significant vendor relationships and any leases. It is not uncommon for companies to receive charges inconsistent with the terms of their agreements. In addition, management is often unaware of incentives and other contract terms beneficial to the company.

An audit of your company’s most significant contracts is appropriate when you suspect there are opportunities to improve pricing or key terms. It will help you identify areas where you are making inappropriate payments that are not in compliance with the contract.

Customer Analysis

A careful review of your clients and customers can unearth opportunities to improve profitability and mitigate risk. You can also evaluate direct and indirect purchasers of your products and services – including your customers’ clients.

The financial health of your customers and their clients can affect your business. We examine your customer base and identify those accounts that are unprofitable or low-margin. This analysis provides you the information you need to determine if you should renegotiate pricing or demand other concessions such as shorter payment terms.

Lastly, our analysis can identify the clients who are consistently behind in payments. These clients treat your business like their bank. The longer these receivables are extended, the less likely you are to collect on them. Now is the time to examine your customer list and determine which clients are high-risk or unprofitable, and which ones are solid. Your solid clients are the client base you want to develop even further.

Expense Reduction Analysis

We can perform an in-depth analysis across the enterprise that can produce significant cost savings. Our experts examine your purchasing processes and policies, vendor strategies, contracts, shipping, transportation and utility costs to identify opportunities for savings. We will work with you to target areas for expense reduction as well as develop a plan to implement these initiatives.

Health Insurance Analysis

Our health insurance analysis evaluates programs from a coverage and cost effectiveness perspective while considering the potential for a captive insurance program. For this analysis, we use information gathered through interview and reviews of insurance policies, risk management programs, loss experience by cover line and other existing documentation.

Lease Analysis

Companies spend a considerable amount of money on leases and other related costs. The amounts owed under these lease contracts can involve complex arrangements, including allocation of common area maintenance charges and other lease costs. The objective of a lease analysis is to determine whether your company has been properly billed according to the agreement. The focus of these engagements is to identify and quantify invoiced cost exceptions that will result in cost savings to you.

Margin Analysis

Often, companies cannot document what aspects of their business are driving their profitability, or alternatively, what areas are not profitable. Each company may have a different method of determining profitability: business units, customers, products, services, geographies.

A margin analysis is intended to help you understand the profitability of different areas within your organization. Ultimately, you can use this analysis to help you make informed decisions on margin improvement opportunities, discontinuance of low margin areas or identification of opportunities to manage margins more effectively.

Travel and Expense Account Review

You may find opportunities to reduce travel costs by tightening policies, renegotiating arrangements with travel partners and enabling employees to utilize technology. Some travel policies have historically allowed employees to choose more costly options such as first class airline tickets or more expensive hotel properties. When we analyze your travel policies, we’ll determine if these policies can be tightened to encourage more cost effective methods.

You may also benefit from technology as a travel alternative. It may be cost effective to utilize conference calling or online meeting application sharing tools like WebEx.

Tough economic times also increase the incentive for employees to commit fraud. Expense reimbursements can provide the opportunity. You may determine that better controls are necessary for expense accounts and employee reimbursement to discourage fraudulent behavior.

Telecommunication Review

We can help you realize savings in infrastructure expenses and capital costs by delivering integrated data and voice services to your employees’ desktop. With a change in the architecture of the network and the bundling of services together, you could realize a cost savings through management reduction and a decrease in recurring monthly carrier charges.

Self-Insurance Review

When companies are self insured, they typically outsource the administration of their health plan to a third party administrator (TPA). While these TPAs often receive SAS 70s, we have frequently found claims processed inaccurately or in some large cases, resolved inappropriately. In addition, companies often find that ‘dependents’ are receiving benefits they are not entitled to under their company’s plan.

We can help assure that your plan is being administered appropriately and identify potential cost savings. For instance, we can help you verify that individual claims and transactions comply with your company’s contract terms and search for ineligible participants, incorrect charges and invalid claims.

Brown Smith Wallace is a nationally ranked top 100 full-service CPA and business advisory firm. We are based in St. Louis with a total staff of more than 300 professionals to serve your needs and help you achieve your growth goals.

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